Bitcoin and Ethereum ETFs Face First Outflows Since Trump’s Election – What’s Behind the Trend?

Bitcoin and Ethereum ETF Outflows Signal Shift in Investor Sentiment – Here’s Why

Bitcoin and Ethereum ETF – United States-based Bitcoin and Ethereum exchange-traded funds (ETFs) saw significant outflows on Thursday, November 14, 2024, marking the first time since Donald Trump‘s election victory in 2020 that the funds experienced negative net flows. Despite continued interest in crypto assets, both Bitcoin and Ethereum ETFs registered outflows, signaling a potential shift in investor sentiment following months of consistent inflows.

Bitcoin ETF Outflows Hit $400 Million

The Bitcoin ETFs collectively faced a substantial outflow of $400.7 million on November 14, according to Farside Investors. This downturn came as Bitcoin (BTC) recorded a slight dip, falling 2% in the past 24 hours to a price of $88,200 after hitting highs of $88,245 earlier in the day.

The outflows from Bitcoin funds come after an unprecedented rally in the digital currency market, which began following Trump’s win in 2020. The bullish momentum continued until earlier this month, when Bitcoin reached a near-record high of $93,500 on November 13.

Notably, BlackRock’s iShares Bitcoin Trust ETF saw a positive inflow of $126.5 million, maintaining strong investor interest. Additionally, the VanEck Bitcoin ETF posted a small but significant $2.5 million in net inflows.

However, the larger Bitcoin ETFs experienced significant losses. Fidelity’s Bitcoin ETF recorded the largest net outflow at $179.2 million, followed closely by ARK Invest and 21Shares’ joint Bitcoin ETF, which saw outflows of $161.7 million. The Bitwise Bitcoin ETF also faced a major outflow of $113.9 million, and Grayscale’s Bitcoin ETFs, including both its main fund and mini ETF, lost a combined $74.9 million.

Ethereum ETFs See First Outflows Since Trump’s Election Victory

In addition to Bitcoin ETFs, Ethereum ETFs also experienced outflows for the first time since Trump’s 2020 election victory. Ethereum’s spot ETFs saw a net outflow of $3.2 million on November 14, following a period of nearly $800 million in inflows since November 4, 2024.

At the same time, Ethereum (ETH) prices also dropped by almost 5% over the last 24 hours, trading just under $3,100. ETH was down from its recent highs, reflecting broader market corrections.

The BlackRock iShares Ethereum Trust ETF led the charge with $18.9 million in net inflows, continuing to attract capital amid a volatile market. Additionally, Invesco’s Ethereum ETF saw a modest $900,000 inflow. However, the Grayscale Ethereum Trust ETF was responsible for the bulk of the outflows, losing $21.9 million.

The Impact of Trump’s Election on Crypto Market Sentiment

The outflows from Bitcoin and Ethereum ETFs contrast sharply with the bullish market trends that began after Donald Trump’s election win in November 2020. Following Trump’s victory, both traditional financial markets and the cryptocurrency market experienced substantial growth, driven by optimism around pro-crypto policies and promises of economic reforms.

In the days following the election, Bitcoin ETFs saw their largest-ever inflows, with a record $1.37 billion entering Bitcoin funds on November 7, 2020. Over the course of six days, Bitcoin ETFs enjoyed a remarkable surge of $4.7 billion in capital, highlighting the sharp rise in demand for crypto-related investments.

This rally continued as Trump’s pro-business, pro-crypto stance generated investor optimism, which helped to fuel the remarkable 30% surge in Bitcoin prices that reached nearly $93,500 earlier this month.

A Changing Landscape for Crypto ETFs?

The recent outflows could signal a shift in investor sentiment, suggesting that the crypto market might be undergoing a period of consolidation after an extended rally. The abrupt reversal in fund flows also raises questions about the future of Bitcoin and Ethereum ETFs, which had become one of the most popular ways for traditional investors to gain exposure to cryptocurrencies.

Despite the outflows, the continued inflows into specific funds, like BlackRock’s iShares Bitcoin Trust ETF and the iShares Ethereum Trust ETF, suggest that institutional investors remain committed to digital assets. These large financial institutions have demonstrated their interest in navigating the volatility of the crypto market, and they may continue to lead the charge in bringing digital assets into the mainstream investment landscape.

However, the divergence between smaller and larger crypto ETFs could point to evolving strategies within the crypto space, where investors are becoming more selective about where they place their capital.

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